Millions of families will face price rises of more than £500 a year if the UK crashes out of the EU without a Brexit deal, a think-tank warned yesterday.

As Theresa May scrambled off to Brussels last night to try to rescue stalled negotiations, the Resolution Foundation revealed exiting the European Union without a trade deal would hit low-income households hardest.

Their report found that the “no-deal” Brexit being pressed for by Tory right-wingers would have a big impact on living standards.

They predict reverting to World Trade Organisation “most-favoured nation” tariffs would see the average price of dairy goods rise by 8.1 per cent, meat products by 5.8 per cent and the cost of transport by 5.5 per cent.

May and Juncker pictured after last night's working dinner (Image: Reuters)

The think-tank found the average household would pay £260 a year more – but three million of the poorest families would face price rises of more than £500 a year.

Ilona Serwicka, of the UK Trade Policy Observatory who helped to produce the report, said: “Our research shows that a ‘no-deal’ scenario will increase the cost of essential goods, such as food and clothes, which will impact most adversely on those households who already struggle to get food on the table and make ends meet.”

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The report was issued as UK ministers refused a Scottish Government request to detail how Brexit will affect Scotland.

Brexit Secretary Mike Russell is understood to have asked for the information at a Whitehall meeting with Brexit Minister David Davis yesterday – only to be told the impact of leaving the EU was being calculated on a sector by sector basis.

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Emerging from talks on how the devolution of EU powers should be handled, Russell said: “The prospect of no deal is utterly unacceptable and would be disastrous for Scotland and the whole of these islands.”

May and Davis last night met chief EU negotiator Michel Barnier and European Commission president Jean-Claude Juncker for a “constructive and friendly” working dinner just days after the Brussels bigwigs warned the negotiations over Britain’s withdrawal were failing to progress.

May is cornering herself into a hard Brexit (Image: Julian Hamilton/Daily Mirror)

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Afterwards, May and Juncker said they “reviewed the progress made in the Article 50 negotiations so far and agreed that these efforts should accelerate over the months to come”.

May was also involved in a series of ring rounds to fellow leaders yesterday ahead of an EU Council meeting later this week. If the other 27 leaders refuse to move talks on from “divorce” negotiations to a trade deal, the PM will come under more pressure from Brexiteers in her Cabinet to walk away.

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The UK Government say they want a comprehensive free trade agreement with the EU that will keep tariffs at zero.

However, May has also stated that they are preparing for a no-deal scenario, in which the UK will impose the same tariffs on the bloc as it does for other WTO countries.

Labour MP Stephen Doughty said: “It’s clear the no-deal Brexit Theresa May is threatening will make working people in this country worse off, with the very poorest paying the price for the Government’s ideological choice of a hard and extreme Brexit.”